Meeting the Challenge
of the Budget Crisis

In our last Semiannual Report, the Acting Inspector General set forth this Office's concerns regarding the precarious fiscal constraints that threatened the viability of some of its most critical operations and functions. During this six-month reporting period, some of those concerns have materialized, and the impact exacerbated by the nearly month-long period of enforced inactivity caused by the furlough situation at the end of calendar year 1995 is being felt throughout the organization.

The challenge we face is to render the same or increased levels of service fighting fraud, waste and abuse with significantly fewer resources. During the period, we operated under a continuing budget resolution that was 7? percent below our fiscal year (FY) 1995 funding level, which did not include $1.96 million for law enforcement availability pay and the annual audit of Department-wide financial statements. Thus, we operated under an effective cut of 14 percent. In addition, over the last 3 years we have sustained personnel losses representing 16 percent of our staff, from 369 in 1993 to 310 at present.

Our efforts to succeed in this difficult enterprise have already begun. In many instances thanks to the dedication, skill and professionalism, not to mention ingenuity and resolve, of OIG staff, and the cooperation of Department managers these efforts have already begun to show excellent results, as described in the pages that follow.

We shall continue to make every possible effort to meet the statutory mandates and regulatory requirements for which we are responsible. But competence, creativity and commitment, while admirable and even essential, cannot ultimately be expected to compensate for inadequate resources. If these are reduced below the proposed funding level for FY 1997, some of the most critical work efforts and work products of this Office may have to be deferred or even cancelled. In recognition of our obligations to the nation's taxpayers and students, and our commitment to the mission of the Office of Inspector General, we are determined to do all we can to see to it that this is one challenge we will not have to meet.

I look forward to working with you and your staffs in the coming months as we seek to achieve a meaningful resolution to these concerns.